Tag Archive for BLS

My latest video is from a talk I gave back in July at the RightOnline conference. I had 5 minutes to give a talk and I had something all planned out… until President Obama gave this speech in Cleveland. In this speech he stated:

Our businesses have gone back to basics and created over 4 million jobs in the last 27 months — (applause) — more private sector jobs than were created during the entire seven years before this crisis — in a little over two years

I decided to check him on his jobs claims and I summarized my findings in my talk, which I reproduced for this video.

There is a more comprehensive jobs number (employment) that tells a very different story.

Deception Through Selection

And here is where I give a little more detail on what numbers I used. First a little background:

President Obama gave this speech on June 14, 2012, so at that time we were using the most recent BLS jobs report which had number up to May. Counting backward from there, that means Obama was counting from March 2010 to May 2012.

March 2010 – 106,914,000 private sector payrolls

May 2012 – 111,040,000 private sector payrolls (revised up 32,000 in later reports to 111,072,000)

I was assuming that when Obama said “before the crisis” he meant before we started losing jobs. That would put the “7 year” number from February 2001 to February 2008.

February 2001 – 111,623,000 private sector payrolls

February 2008 – 115,511,000 private sector payrolls

Difference in 7 years – 3.88 million private sector payrolls

As you can see, the Obama graph is a nice simply upward slope including only the part of his presidency where he gained jobs. In fact, he starts counting only after the jobs number completely bottomed out. If we look at the jobs record during his entire time in office, we get this chart

Is there any thing wrong with not counting those initial job losses? I don’t think so. I think it is a perfectly reasonable thing to do to say “let’s look at the strength of the recovery alone” and use that metric to count. But it is incredibly disingenuous of the Obama team to completely discount job losses for themselves but then turn around and count them in the comparison data point.

In the video, I point out that using “6 years before the crisis” or “5 years before the crisis” result in vastly larger numbers (6.4 million and 7.1 million respectively), but what I’m really interested in here (and what I’d like to expand upon) is comparing private sector payroll growth that Obama is touting to the private sector payroll growth under Bush.

I looked at this a couple months ago and was a little shocked to see the following chart, but here it is. Starting at the low point of private sector jobs growth, if we chart what I will (for simplicity sake) call the Bush recovery (starting in July 2003) and the Obama recovery (starting in March 2009) using the latest data, we get:

As you can see… the weird thing about this current recovery is how closely it is tracking to the previous recovery in terms of private payroll increases. For Obama to pretend he is substantially better than Bush on this metric is nothing short of fantasy.

The Larger Jobs Number (Employment)

The first one is the establishment data (B Tables) and this is a survey counts jobs by industry. Think of it as someone calling a bunch of businesses and asking “How many people do you have on payroll?” They directly sample over 100,000 businesses and it has a margin of error of about 100K jobs.

The second one is household data (A Tables) and this is a survey of households. Think of it as someone calling a bunch of people and asking “Do you have a job?” It samples about 60,000 households and has a much larger margin of error (400K jobs).

The establishment data is usually used for month-to-month job counts in part because it tends to be a much less volatile metric (household data can swing somewhat wildly). That’s why, when you hear about “X jobs gained last month”, they use the number from the establishment survey.

However, a weird thing happened in the 00’s with the household survey. If we take the private payrolls and compare them to what I’m going to call “private employment” (the A table employment number minus government jobs), we see a massive difference in the job count.

That’s a 3 million job difference between private payrolls and private employment. This is way outside the margin of error. Something happened there, althoughI’m not sure what. Maybe self-employment increased, or people made ends meet w/ irregular non-payroll income or farm employment jumped. I honestly don’t know and anything I say here is pure speculation. But there it is, clear as day.

This is why Obama focuses so much on private payrolls as the metric he uses. Most fact-check organizations are not savvy enough to notice that there is this huge discrepancy in the jobs data from survey to survey. They only think to check Obama’s statements against the private payrolls data, not the overall employment.

As you can see, the change in both jobs numbers are nearly identical. If we add in government job losses, we actually get a negative number on employment change since his inauguration. This shows that something was happening in the last recovery that isn’t happening in this one.

Every month when the BLS releases the employment report, I dig into the data and tweet about it at length using the hashtag #BLSFriday. (Follow me on Twitter to catch this incredibly exciting data dive. The next one is on June 1st.)

If you’ve been following the job numbers closely, you’ll know that this recession we’ve seen a particularly sharp drop in labor force participation. Labor force participation measures how many people either have a job or are looking for a job as a percentage of the population. As of March 2012 labor force participation has dropped to 63.6%, the lowest point since December 1981.

Because the unemployment rate doesn’t measure people who aren’t in the Labor Force, many (especially conservatives) have noted that the unemployment rate is “artificially” low and that many have left the labor force, basically giving up even looking for a job.

One Twitter friend, @rizzuhjj, pointed out that the Chicago Fed has a paper that claims that half of the post-1999 decline in the labor force is due to long-term demographic trends, specifically, Baby Boomers aging.

Here is a chart of the labor force participation rate since it the last time it was this low. You can see that we’re at the point where Boomers are starting to retire, so surely that would be driving the massive drop in labor force participation and not due to the recession, right?

To test this, I decided to sift through the employment data by age, as provided by the BLS. In January 2008, the participation rate by age looked like this (click to enlarge).

(The outline is a rough approximation of where Baby Boomers land in the data. Which is OK because the Baby Boomers are an approximate age group anyway.)

You can see that the boomers are largely entering the age ranges where participation in the labor force drops off significantly. So, on the surface, this explanation makes sense.

This was my test: Take the participation rates for post-Baby Boomers (16-49 year old) and multiply them for the corresponding populations for those ages. That way we’ve isolated just the post-Baby Boomer labor force and can see if it is smaller now than it was 3 years ago. This is what I found.

Or, to make it a little clearer, this is the change in labor force participation by age since January 2008.

Apply the January 2008 participation rates to current population and this means we are missing 3.4 million post-Baby Boom workers from the labor force. These post-Boomers account for 68% of the “missing” work force.

If labor force participation was dropping only due to Baby Boomer retirement, the rate should have dropped from 66.2% in January 2008 to 64.8% today. Instead, it is 63.6%. There is certainly a good deal of room for improvement to get younger people back into the labor force. We shouldn’t simply push the problem off to being Boomer retirement or we risk ignoring a whole generation that is unemployed and flying under the radar.

January 2012 BLS Files

Brief Interruption To Beg

This took a not-insignificant amount of time and if you use it in anything resembling a professional capacity, I’d really appreciate a beer as a way of saying thank you.

BLS-To-Excel Application

For those of you who are a little more interested in the data and willing to follow a lot of directions, I’ve decided to publish the program I use for this so that you’re not reliant on me to publish this every month. I do mostly Microsoft development, so you’ll need Windows to run the project

The code is a disaster in a large part because the BLS data is something of a disaster. However, the app itself contains some helpful tutorials on how to get the data and make everything work.

It looks awful. But if you follow the directions, it works.

This will never be a professional application, but I’ll update it as I can. If you happen to have any talent in design, my “thing” is translating designs to reality. So if you want to send me even a screenshot of how you think this app should work, I’m happy to incorporate that into the next version.